European sales have fallen for five consecutive months, and Musk has fired the heads of Tesla's North American and European operations

According to media reports citing sources, Tesla (TSLA.US) CEO Elon Musk has fired the head of the company's North American and European operations due to dissatisfaction with the company's performance and declining market visibility. This marks the second executive personnel change for the global electric vehicle leader, which is struggling with sales fluctuations this month, highlighting Musk's aggressive restructuring efforts to boost Tesla's global sales, particularly in the European market.

Sources revealed that Omead Afshar, who began his career at Tesla as an engineer in 2011 and subsequently rose to become one of CEO Musk's senior aides and a long-time close friend, was held accountable for the continued poor sales in the European market and was ultimately dismissed by Musk. Afshar's name can no longer be found in Tesla's internal directory.

According to the company's latest sales data, Tesla's overall electric vehicle sales in Europe have significantly declined for five consecutive months, with a decrease of approximately 28% in May compared to May 2024, while demand for electric vehicles across Europe has increased.

Data compiled by the European Automobile Manufacturers Association (ACEA) shows that Tesla's new car registrations in May fell to just 8,729 units, a year-on-year decline of 40.5%, reducing its market share from 1.6% last year to 0.9%. Year-to-date, Tesla's market share in Europe has hovered around 1%, far below about 2% a year ago.

Before the company releases its global electric vehicle delivery report for the second quarter, Wall Street analysts generally expect Tesla to deliver 393,000 electric vehicles globally this quarter, indicating an 11% year-on-year decline but a potential 17% increase compared to the previous quarter.

As of Thursday's market close, Tesla's stock price fell 0.54% to $325.78, marking three consecutive days of declines.

Wall Street investment firm Baird has lowered its delivery forecast for Tesla's second quarter to just 377,000 vehicles. Analyst Ben Kallo noted that weak third-party data since May and the ramp-up of production for the new Model Y (which is expected to continue slightly this quarter) could lead to poor performance data.

Kallo wrote, "Delivery volume remains an important component of the fundamentals, but we note that the recently launched autonomous taxi service and the public's eager anticipation of this opportunity may dominate in the short term. We believe that launching a more affordable model could have a net negative profit impact in the second half of 2025."

UBS has also released a research report reiterating its "sell" rating on Tesla stock, setting a target price of just $215. UBS expects Tesla's Q2 global delivery volume to be around 366,000 units, an 18% year-on-year decline and a 9% quarter-on-quarter increase, which is 10% lower than the market's general expectations UBS stated in a research report that as investors continue to focus on Tesla's fully autonomous taxi Robotaxi, which is currently being tested, many bulls are expected to "ignore" electric vehicle delivery data, as they believe the value of Tesla stock lies in artificial intelligence (FSD, Robotaxi, and humanoid robots built on Tesla's AI supercomputing system). However, UBS emphasized that Tesla's current financial performance primarily relies on its automotive business, which not only helps fund its cutting-edge ventures but also, as stock prices rise and the outlook for the automotive business continues to deteriorate, the market injects higher premiums into already expensive AI options, with very little actual supporting data.

UBS indicated that disappointing delivery reports could serve as a reality check. Historical data shows that when delivery numbers fall short of expectations, Tesla's stock price tends to decline, but the anomaly from the last quarter is worth noting: despite delivery numbers being 11% below market expectations, Tesla's stock price rose 5%, marking the largest divergence since 2022